Professor Royalty’s research focuses on health economics and she teaches Ph.D. courses in health economics. Her area of special interest is health insurance and health care cost growth specifically addressing four closely related areas: the effect of employer-provided health insurance on labor market outcomes; offering and take-up of employer health insurance coverage; assessments of how well insurance is working for various populations; and health care cost growth.

Professor Royalty’s work on health insurance and labor market outcomes grew naturally out of her background in labor economics in combination with an interest in the many implications of the strong link between employment and health insurance in the U.S. Other important questions that she addresses concern the offering and take-up of employer health insurance coverage since both employer offerings and employee take-up affect the growing number of Americans who are uninsured - over 50 million of the nonelderly as of 2009. While being covered or not is the starkest difference in terms of health insurance, it is not the only important difference. Professor Royalty has also examined how coverage options and generosity vary for households with two earners and, more recently, the implications of moral hazard for commonly used threshold measures of underinsurance. All of these issues are exacerbated by health care cost growth. Rising premiums will further distort labor market outcomes, make take-up decisions more difficult, and increase workers’ out-of-pocket costs. Seeking to understand the reasons for the dramatic growth in costs over the last few decades was therefore a natural next step in working to understand how health insurance and health care costs affect the well-being of individuals and families

"The Effect of Premiums on the Decision to Participate in Health Insurance and Other Fringe Benefits Offered by the Employer: Evidence from a Real-World Experiment," Journal of Health Economics, January 2005, pp. 95-112.

"Does Having Two Earners in the Household Matter for Understanding How Well Employer- Based Health Insurance Works?" (with Jean Abraham), Medical Care Research and Review, April 2005, pp. 167-186.